BPA Fish and Wildlife FY 1997 Proposal

Section 1. Administrative
Section 2. Narrative
Section 3. Budget

see CBFWA and BPA funding recommendations

Section 1. Administrative

Title of project
Changing River Operations, Hydropower Production, & Air Pollution

BPA project number   9304400

Business name of agency, institution or organization requesting funding
Environmental Defense Fund

Sponsor type   OR-Consultant

Proposal contact person or principal investigator

BPA technical contact   Dan Daley, EWI 503/230-3066

Biological opinion ID   None

NWPPC Program number   5.2A.7

Short description
This project analyzes and demonstrates with specific pilot projects the linkages between changes in river operations for salmon recovery and resulting changes in Columbia River hydropower system production and air pollution levels.

Project start year   1993    End year   1999

Start of operation and/or maintenance   

Project development phase   Implementation

Section 2. Narrative

Related projects

Project history
Project History: April 15, 1993 to January 31, 1996

Pilot Water Acquisition Project Development: EDF performed detailed analysis and negotiation with initial pilot project candidates regarding Snake water rights in Oregon and Idaho. The largest single transfer of a water right to an instream flow in the Pacific Northwest was consummated by BPA based on EDF's work with BPA staff . The transfer included a lease with option to purchase involving nearly 10,000 irrigated acres near Ontario, Oregon. EDF prepared analysis of the project and water transfer applications to the State of Oregon for leased water in 1994 and 1995 water years. Leases transferred 16,000 acre-feet of water back to the Snake and Malheur Rivers during the 1994 and 1995 water years. EDF has also performed scoping of other water acquisition prospects for river flows in Idaho and Oregon (Snake Basin) and Washington (Snake, Columbia, and Yakima Basins).

Energy and Environmental Benefits Analysis: EDF worked with BPA and NPPC staff to develop a cost-effectiveness methodology for evaluating water acquisition and other water management options in the Snake and Columbia Basins. EDF's April, 1995 report Water for Salmon: An Economic Analysis of Salmon Recovery Alternatives in the Lower Snake and Columbia Rivers provides a cost-effectiveness ranking of salmon flow improvement alternatives in a variety of water storage, management, and acquisition projects in the Snake Basin.

Biological results achieved
The pilot water transfer project produced increased river flows in the lower Malheur, lower Snake, and lower Columbia Rivers. These flows improved salmon migratory habitat conditions as well as residential fish habitat conditions. The precedents established by the pilot project, along with EDF's analytical work, provide a guide to the implementation of a larger scale of water transfers to river flows and concomitant habitat benefits for salmon and other fisheries.

Annual reports and technical papers
(1) Water for Salmon: An Economic Analysis of Salmon Recovery Alternatives in the Lower Snake and Columbia Rivers, Environmental Defense Fund, April, 1995, 124 p.
(2) EDF Quarterly reports to BPA, 1993-95
(3) Application for lease of instream flow rights, Skyline Farms, submitted by BPA to the Oregon Water Resources Department, 1994, 1995
(4) Hydropower Benefits of Water Transfers to Instream Flows above Hells’ Canyon, Skyline Farms, 1993
(5) Local Economic Effects of Skyline Water Acquisition, Malheur County, presentation to Malheur County Water Committee, 1994.

Management implications
This project utilizes the only method of achieving voluntary, market-based water transfers to instream flows. River flow improvements for anadromous fishery habitat improvements must address the issue of how existing out-of-river water uses can be changed to provide more river flows. The water acquisition methods analyzed and demonstrated in this project show very clearly that such reallocations and changes in water uses can be implemented in a businesslike manner. The analysis produced as part of this project show that river flows for salmon and other fisheries and river flows for hydropower production can be made to work together to produce both salmon and energy benefits. In addition some measures to produce these benefits through changes in water use and river operations are more costly than others -- this project has produced a cost-effectiveness methodology to rank potential projects.

Specific measureable objectives
Determine energy and air pollution effects of alternative river operations required by NPPC Fish and Wildlife Program measures. A system of air pollution credit and debiting will allow evaluation of alternative river operations with respect to atmospheric effects.

Testable hypothesis
Changing river operations to restore salmon and other fisheries have hydroelectricity production effects which in turn have atmospheric pollution effects. Depending upon the specific characteristics of changes in river operations and consequent changes in electric power generation in the Northwestern and western power grids, atmospheric pollution can be increased or reduced as a consequence. A system of accounting for these atmospheric effects through pollution reduction credits can help to increase the cost-effectiveness of changes in river operations for salmon and other fish and wildlife.

Underlying assumptions or critical constraints
When hydropower production changes in the Columbia River Hydropower System, other electricity generation sources within and/or outside the Northwest adjust to meet the load pattern of electricity demand. This kind of adjustment already occurs on an ongoing basis as water conditions in the Columbia Basin change due to weather and withdrawals of water for out-of-river uses. Further changes in river operations for salmon and fish and wildlife purposes will be accommodated in a similar fashion. Existing data and computer models, including the previous cost-effectiveness work of EDF (1993-95), can be applied to analyze the impacts of changes in river operations on atmospheric pollution.

Methods
(1) Project design: NPPC measures which alter river operations for salmon and other fish and wildlife will be defined in terms of hydrological impacts over an array of 50 water year conditions. Existing computer models at BPA and NPPC will be applied to the analysis of the hydropower impacts of these changes in river operations as well as the cost-effective means of acquiring/selling resulting electricity deficits/surpluses. These electricity acquisition/sales will in turn be analyzed for atmospheric pollution effects, including CO2, SO2, NOX, particulates, and other regional air pollutants as appropriate. (2) Statistical analysis: Statistics will be based on 50 water year conditions. Current use of the 1929-78 period may be replaced with a randomly generated sequence of water year conditions depending upon current protocols at BPA and the NPPC. (3) Number and type of fish used: This project does not involve direct work with fish populations.

Brief schedule of activities
1997: Identify NPPC Fish and Wildlife Program river operation changes; define hydrologic effects in terms of flows if implemented over 50 water year conditions; evaluate and access existing hydropower models; develop air pollution effects model, or identify existing model to estimate pollutant-by-pollutant effects of changes in hydropower generation in the Columbia hydropower system

1998: Produce report evaluating the energy and air pollution effects of NPPC Fish and Wildlife Program's changes in river operations. Develop a proposed system of air pollution credits which can be utilized to monitor the effects of river operation changes. Include a proposal for air emissions trading linked to river operation changes which could increase/decrease the cost-effectiveness of measures to change river operations according to the value of air pollution reductions/increments resulting from measures.

1999: Develop one or more air pollution crediting and trading pilot projects to demonstrate the associated economic opportunities of changes in river operations of the Columbia River Hydropower System.

Biological need
Changes in river operations in the Columbia and Snake Basins and tributaries for salmon recovery and other fish and wildlife goals have energy and air pollution consequences. Identification of cost-effective changes in river operations is necessary to maximize the biological productivity of BPA expenditures of these goals. Cost-effectiveness cannot be achieved without evaluation of the energy and air pollution effects of alternative changes in river operations. This project contributes to the identification and implementation of cost-effectiveness of river operation alternatives intended to improve the biological viability of salmon and other fish and wildlife populations.

Critical uncertainties
The most important uncertainty underlying this project is the biological effectiveness in restoring salmon populations of changes in river operations. Another key uncertainty involves the changing nature of the electric utility industry toward a competitive framework. Given changing utility industry structure, future prices of electricity and generation fuel types and technologies will continue to be uncertain. This in turn introduces uncertainty into the air pollution consequences of changing river operations in the Columbia River Hydropower System. These uncertainties can be addressed using probabilistic analysis in this project.

Summary of expected outcome
This project will first analyze and quantify the relationship between river operations, hydropower production, and air pollution in the Columbia River Hydropower System. With this understanding, specific pilot projects linking the air pollution reduction benefits resulting from changes in river operations will be developed to demonstrate the extraction of economic and environmental benefits possible from some river operation changes. The inclusion of these benefits will change the overall cost-effectiveness ranking of some river operation changes.

Dependencies/opportunities for cooperation
During the first two years of this project, the acquisition and utilization of existing hydropower and air pollution models by EDF will require cooperation from technical staff at BPA, NPPC, and possibly other entities. In the third year, cooperation from local, state, and federal air pollution regulators in the Northwest and elsewhere in the western power grid will be sought in designing air pollution credit pilot projects.

Risks
The principal risks associated with this project are (1) air pollution effects of changes in river operations are insignificant; (2) air pollution regulators do not facilitate the identification, monitoring, and crediting of air pollution benefits resulting from changes in river operations; and (3) electric power operators within BPA and other utilities do not acknowledge air pollution reductions associated with changes in river operations.

Monitoring activity
The project's outcomes will be measured first by the production of a reviewed report on the linkages between river operations and air pollution and, by the third year, by the success in implementing specific pilot projects to demonstrate these linkages. The utility of these products will ultimately depend upon their incorporation into cost-effectiveness analysis of river operation alternatives. To the degree that they are integrated into cost-effectiveness measures which are in turn adopted as decision criteria in selecting river operations aimed at salmon recovery and other fish and wildlife goals, this project's products will contribute to maximizing the returns in salmon recovery from BPA expenditures.

Section 3. Budget

* For most projects, Authorized is the amount recommended by CBFWA and the Council. Planned is amount currently allocated. Contracted is the amount obligated to date of printout.

Funding recommendations

CBFWA funding review group   Mainstem

Recommendation    Tier 3 - do not fund